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Did Hedge Funds Drop The Ball On Chart Industries, Inc. (GTLS) ?

Does Chart Industries, Inc. (NASDAQ:GTLS) represent a good buying opportunity at the moment? Let’s briefly check the hedge fund interest towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on satellite photos and other research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail inconceivably on some occasions, but net net their stock picks have been generating superior risk-adjusted returns on average over the years.

Chart Industries, Inc. (NASDAQ:GTLS) investors should pay attention to a decrease in hedge fund sentiment in recent months. Our calculations also showed that GTLS isn’t among the 30 most popular stocks among hedge funds.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Brian Gustavson 1060 Capital

Let’s go over the new hedge fund action regarding Chart Industries, Inc. (NASDAQ:GTLS).

What have hedge funds been doing with Chart Industries, Inc. (NASDAQ:GTLS)?

Heading into the first quarter of 2019, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of -17% from the previous quarter. By comparison, 11 hedge funds held shares or bullish call options in GTLS a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

GTLS_apr2019

The largest stake in Chart Industries, Inc. (NASDAQ:GTLS) was held by Millennium Management, which reported holding $61.2 million worth of stock at the end of September. It was followed by Fisher Asset Management with a $48.5 million position. Other investors bullish on the company included Citadel Investment Group, Columbus Circle Investors, and Alyeska Investment Group.

Because Chart Industries, Inc. (NASDAQ:GTLS) has witnessed falling interest from the aggregate hedge fund industry, we can see that there is a sect of hedge funds that slashed their entire stakes last quarter. Intriguingly, Till Bechtolsheimer’s Arosa Capital Management dumped the largest stake of all the hedgies monitored by Insider Monkey, worth about $18.5 million in stock. David Harding’s fund, Winton Capital Management, also dropped its stock, about $12.9 million worth. These transactions are interesting, as aggregate hedge fund interest was cut by 3 funds last quarter.

Let’s also examine hedge fund activity in other stocks similar to Chart Industries, Inc. (NASDAQ:GTLS). We will take a look at AppFolio Inc (NASDAQ:APPF), Heron Therapeutics Inc (NASDAQ:HRTX), Glaukos Corporation (NYSE:GKOS), and ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD). This group of stocks’ market valuations resemble GTLS’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
APPF 14 171232 -5
HRTX 25 716009 -6
GKOS 11 49669 -3
ACAD 20 846012 1
Average 17.5 445731 -3.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 17.5 hedge funds with bullish positions and the average amount invested in these stocks was $446 million. That figure was $264 million in GTLS’s case. Heron Therapeutics Inc (NASDAQ:HRTX) is the most popular stock in this table. On the other hand Glaukos Corporation (NYSE:GKOS) is the least popular one with only 11 bullish hedge fund positions. Chart Industries, Inc. (NASDAQ:GTLS) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. A small number of hedge funds were also right about betting on GTLS as the stock returned 29.8% and outperformed the market by an even larger margin.

Disclosure: None. This article was originally published at Insider Monkey.

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